By Aditya Soni
(Reuters) -The “Magnificent Seven” stocks were poised to gain more than $1 trillion in market value on Wednesday after U.S. President Donald Trump approved a 90-day tariff pause, easing pressure on tech giants that had tumbled in recent sessions.
Shares of the companies, which include AI chip giant Nvidia, Apple, Tesla and Microsoft, were up between 7.8% and 13%, powering a market rally that pushed the Nasdaq up 8%.
The group of high-performing tech stocks has driven the market for years, but its fortunes took a turn for the worse in the past few months as doubts arose about the AI spending spree, and U.S. waged a trade war with sweeping tariffs.
The companies have collectively shed around $5 trillion in market value since their peak in late 2024, with the losses accelerating last week after Trump slapped tariffs on imports from countries including major tech market and exporter China.
“For tech stocks this was much needed relief and pulls stocks and the market from the edge of the cliff although China remains the biggest X variable related to Apple and the broader supply chain,” Wedbush Securities analyst Dan Ives said.
Trump said on Wednesday he would pause many of his new tariffs for 90 days, even as he raised them further on imports from China. His sudden reversal came less than 24 hours after steep new tariffs kicked in on imports from dozens of trading partners.
Trump said he would raise the tariff on Chinese imports to 125% from the 104% level that took effect at midnight. At the same time, he said he would lower them on other countries also subject to his new targeted duties.
“It offers businesses a temporary reprieve to exhale, recalibrate and resume strategic planning with more time but a still unclear outlook,” said Michael Ashley Schulman, chief investment officer at Running Point Capital.
“Big Tech’s AI ambitions require enormous capex, cross-border talent, and complex hardware dependencies. Tariff and trade clarity are critical to removing layers of uncertainty from budgeting decisions.”
Earlier in the day, Alphabet, whose shares were up 7.9%, reiterated that it would spend about $75 billion this year to build out data center capacity, doubling down on its generative AI bet.
(Reporting by Aditya Soni in Bengaluru; Editing by Shinjini Ganguli)
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